HC PQ [Pensions and National Insurance]

The Ministry of Pensions and National Insurance was first for questions on this occasion, i.e., immediately after Prayers at 1430. Concluding time unknown. MT spoke at cc2-14.

Importance ranking:

Minor

Word count:

4897

Themes:

Higher and further education, Employment, Taxation, Social security and welfare

2

PENSIONS AND NATIONAL INSURANCE

Unemployment Benefit (Short-Time Working)

2. Mr. D. Foot

asked the Minister of Pensions and National Insurance whether he has now decided to refer to his Advisory Committee the question of unemployment benefit payable to workers on short time.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mrs. Margaret Thatcher)

This question was comprehensively examined by the National Insurance Advisory Committee in 1955 and changes in the law affecting workers on short time were approved by Parliament in 1957. [ Niall Macpherson] My right hon. Friend is keeping this subject under review, but he has no proposals for referring it to the Committee again.

Mr. Foot

Does not the hon. Lady realise that with the spread of short-time working in many parts of the country this year this has become a really acute problem? Does she not think that it is at least worth further consideration by the Advisory Committee?

Mrs. Thatcher

The Advisory Committee spent almost two years on this problem and had very wide terms of reference. The differences between its members were very deep and I do not 3think that any useful purpose would be served by again referring the question to the Advisory Committee.

Retirement Pensions

3. Mr. A. Lewis

asked the Minister of Pensions and National Insurance whether he is aware that, before the receipt of the recently announced increase in retirement pensions, pensioners are having to pay more for bread, butter, sugar and rates, and that the official cost of living figure has again risen to a new high level; and whether he will therefore take steps to increase retirement pensions.

Mrs. Thatcher

The Retail Prices Index is only about one and a half points higher now than when the pension increases were announced. In general, prices have risen by 8 per cent. since the previous benefit increases. This would have been met by an extra 4s. 6d. on the single rate compared with last month's actual increase of 10s.

Mr. Lewis

Does not the hon. Lady realise that, on her own statement, prices and the cost of living had risen before the old-age pensioners received their increase, and that the previous pensions increase she mentioned did not compensate for the previous price increases? Is she not aware that this is a continuing problem, because every time the pensioners receive an increase the cost of living has already gone up? Will not the hon. Lady the pensions to the cost-of-living-index figure?

Mrs. Thatcher

If I were to accept the hon. Member's suggestion, it would mean that, taking it from 1946, the present single rate of pension would be 48s. 8d. instead of the 67s. 6d. that it is, and that the present married rate would be 78s. 8d. instead of the £5 9s. that it is.

Home Confinement Grant

4. Mrs. Butler

asked the Minister of Pensions and National Insurance when he proposes to increase the amount of the home confinement grant.

Mrs. Thatcher

My right hon. Friend has no proposals for increasing the amount of this grant, which is now double what it was when the grant was introduced in 1953.

Mrs. Butler

Does the Parliamentary Secretary think that the present grant 4of £6 is adequate to meet all the additional expenses, bearing in mind that the cost of a home help alone is more than £6 for a five-day period? Since more and more mothers are compelled to have their babies at home, is it right that because of the shortage of maternity beds they should suffer financial hardship?

Mrs. Thatcher

The grant is made as a contribution towards extra expenses. All the medical and nursing expenses are, of course, met. The hon. Lady mentions the additional expense of a home help, but this expense frequently has to be met when the mother is confined in hospital and has a young family left at home.

5. Mrs. Butler

asked the Minister of Pensions and National Insurance what arrangements he is making to enable mothers to claim a proportion of the home confinement grant if they are discharged from hospital after 48 hours.

Mrs. Thatcher

My right hon. Friend does not contemplate any change in the present provisions. The home confinement grant is a single payment of £6 for confinement at home and is additional to the maternity grant of £16. There is already provision for it to be paid in full in the circumstances described in the Question if the mother was admitted to hospital as an emergency case.

Mrs. Butler

Is the hon. Lady aware that it has become increasingly the practice of hospitals now to discharge mothers after 48 hours? Therefore, these mothers would not come within the scope of the hon. Lady's reply. Since their expenses would be very much the same as those of mothers in home confinements, will the hon. Lady look at the question again?

Mrs. Thatcher

The maternity grant as such already has an element of attendance allowance in it. Indeed, the two were combined into one in 1953. We put up the maternity grant by £2 in the last increase.

Earnings

6. Mr. Frank Allaun

asked the Minister of Pensions and National Insurance approximately how many people are at present being refused the full National 5Assistance to which they would be otherwise entitled because their earnings are smaller than that amount.

Mrs. Thatcher

About 27,000.

Mr. Allaun

Does not this mean that more than 100,000 children are living on lower than the subsistence level because of the breadwinner's unemployment or sickness? Therefore, would the Minister consider either increasing the family allowances for these children or paying family allowances in all cases up to the third or fourth child?

Mrs. Thatcher

My right hon. Friend at the moment has no proposals for increasing family allowances.

Miss Herbison

Surely the hon. Lady is aware that the families in the 27,000 which she has mentioned are living sometimes very much below what the Government have decided is the subsistence level? Since that is the case, surely the Government must give serious thought to what they are going to do to help these families?

Mrs. Thatcher

As the hon. Lady knows, the problem arises because National Assistance takes account of a person's private obligations and the wages system cannot. We do not think it right to pay more to a person when he is out of work than he could possibly earn when he is employed.

16. Mr. Hector Hughes

asked the Minister of Pensions and National Insurance if he is aware that many poor persons with obligations are penalised by the National Assistance earnings rule; and what steps he will take to assist them by an alteration of the rule.

Mrs. Thatcher

The Board has no proposals for changing the amounts of earnings which are at present disregarded for the purpose of assessing National Assistance allowances.

Mr. Hughes

The earnings rule penalises people who are willing to work and also reduces National productivity. Is this not a thoroughly unpatriotic penalty upon the people concerned? Will the Minister take steps to see that justice is done to this class of people?

Mrs. Thatcher

National Assistance is related to actual need. The more one increases the disregards the further one gets away from actual need.

6

Mr. Lawson

Is the hon. Lady aware that at present many workers are being given a wage or earnings limit of £9 a week? Irrespective of the children that they have, they are allowed no more than £9 a week, and will the Minister see that these scales are brought up or that the earnings rule is altered?

Mrs. Thatcher

The weekly earnings limit was changed in 1959. It is now 30s. a week plus half of the next 20s. for persons not required to register for work. For an unemployed person who has to register for work it is 15s. a week.

17. Mr. Lipton

asked the Minister of Pensions and National Insurance how many widows now have their pensions reduced by the new earnings rule; and what is the saving to public funds as a result.

Mrs. Thatcher

It is too soon to assess the effects of the recent changes in the earnings rules, but from earlier information, we think that the number of widow beneficiaries affected will be of the order of 70,000 and the annual amount involved about £6½ million.

Mr. Lipton

In view of those figures in comparison with the figures announced in reply to previous Questions, does not the hon. Lady think the time has come to abolish the earnings rule altogether and also to remove many of the other anomalies and injustices which affect widows?

Mrs. Thatcher

There is a good deal to be said for a view to which I do not think the hon. Gentleman has given quite enough consideration, namely, that the widow whose family responsibilities preclude her from being able to go out to work should get more from the National Insurance Fund than the widow who can earn quite appreciably.

Mr. Speaker

I must ask the House to exercise some restraint about the number of decibels in conversation.

Insurance Contributions

7. Mr. Hannan

asked the Minister of Pensions and National Insurance if he will state the total weekly insurance contribution, including graduated contribution, today of an adult male worker earning £17 per week, and the weekly 7insurance contribution payable by such a worker in June, 1951.

Mrs. Thatcher

The weekly contribution payable for National Insurance and Industrial Injuries by an adult male worker earning £17 per week and participating in the graduated part of the National Insurance scheme is 15s. 10½d. Of this, 6s. 11d. is the graduated contribution. In June, 1951, when there were, of course, no arrangements for graduated pensions, the contribution payable for insurance was 4s. 2½d.

Mr. Hannan

Does not the Minister appreciate that these figures show the swingeing increase that has taken place in indirect taxation and that her Department is being used as a tool by the Treasury to pursue its financial policies? Is it not time that the Government recognised the the graduated scheme is a fraud perpetrated on the population? When are they going to review the circumstances?

Mrs. Thatcher

The only thing which would be a fraud would be if we were to try to persuade the population that large increases in benefits could be had without large increases in contributions.

9. Mr. W. Hamilton

asked the Minister of Pensions and National Insurance if he will state the weekly insurance contribution paid by an adult male worker in 1951, 1955, 1959, and in June, 1963, assuming that he is now contracted out of the graduated pensions scheme.

Mrs. Thatcher

The weekly contribution paid for National Insurance and Industrial Injuries by an adult male worker was 4s. 2½d., 6s. 0½d., and 8s. 0½d. in June, 1951, 1955 and 1959, respectively. The present insurance contribution paid by such a worker contracted out of the graduated pensions scheme is 11s. 4½d.

Mr. Hamilton

Does the hon. Lady not realise that this is a very swingeing form of regressive taxation? Does she not further agree that these low income groups have lost much more by this form of regressive taxation than they could possibly have gained by any Income Tax concessions which the present Government have conceded? Will the hon. Lady undertake to produce these figures in graphical form as part of the Tory propaganda in the coming election?

8

Mrs. Thatcher

I will leave the hon. Gentleman to do his own homework. I am sure he is capable of doing the graph himself from the figures. I do not agree that it is a swingeing form of taxation. Our present system of insurance means that those with lower incomes pay less while those with higher incomes pay more for their retirement pensions. Those with higher incomes, again, pay more towards the Exchequer contribution. That seems to be sensible.

Sir C. Osborne

Will not my hon. Friend confirm that the average industrial wage in 1951 was £7 10s. whereas today it is nearly £16 a week? Therefore, with increased wages, is it not reasonable to expect the worker to pay more for the social benefits that he gets?

Mrs. Thatcher

Average earnings when the first contribution was fixed in October, 1946, were 120s. 9d. Average earnings for October, 1962, the latest date for which figures are available, were 317s. 3d.

Mr. Ross

Can the hon. Lady say what a man earning £7 10s. in 1951 would have paid and what he would pay today?

Mrs. Thatcher

There is a Question on the Order Paper later. I have just given these figures, including the present contracted-out contribution.

Widowed Mother's Allowance

8. Dame Irene Ward

asked the Minister of Pensions and National Insurance whether he will make a statement on continuing the widowed mother's allowance in respect of children remaining at the age of 18 years at school awaiting their university places.

15. Mr. Hector Hughes

asked the Minister of Pensions and National Insurance if he is aware of the hardship imposed on widowed mothers of children of 18 years of age awaiting university places by the present regulation relating to mother's allowance in such cases; and if he will now take steps to remove this hardship.

Mrs. Thatcher

My right hon. Friend replied to a similar Question on 20th May, and I have nothing to add to that reply.

Dame Irene Ward

Is my hon. Friend aware that the reply to the Question on 20th May was that the Minister could not give an answer? Would my 9hon. Friend be kind enough to let me know when the Minister's representations to the Cabinet have received an answer and when I may put down a Question so that we may know that action is being taken?

Mrs. Thatcher

I will naturally do all in my power to help my hon. Friend. Perhaps it will assist her to know that her representations made earlier in the year have made a profound impression upon us.

Mr. Brockway

Is the hon. Lady aware that a very large number of boys and girls are now staying on at school till they are 19 years of age, among other purposes to sit for university examinations, and in these circumstances will she not do something to help their widowed mothers who have great difficulty in maintaining them during that period?

Mrs. Thatcher

The hon. Gentleman knows that in most cases education maintenance grants are available after the age of 18 and are assessed according to the income of the widow. The scheme which we have to operate gives allowances regardless of means, and at the moment we think the education maintenance grant is a more suitable vehicle.

Mr. Hughes

Does the Minister not realise that it is not the fault of either the mother or the child that they are poor and that they should not be penalised for their poverty? Steps should be taken to ensure that they are not so penalised and that the child is given a proper opportunity for education.

Mrs. Thatcher

The hon. and learned Gentleman's Question refers only to those staying at school awaiting university places. A number of other children are also affected. Further, there are amongst recipients of the widowed mother's allowance people whose personal circumstances vary very widely. I could not therefore, agree with the hon. and learned Gentleman's sweeping generalisation.

Miss Herbison

Surely the Minister ought to give some regard to the children of widowed mothers? Is she aware that to draw our attention to the maintenance grants that are paid is of no help at all, since these maintenance grants are decided at the beginning of the year and if a student becomes 18 before the end 10of the school year the grants are not received. No National Assistance is paid and no unemployment benefit can be paid until the student leaves school and registers as an unemployed person. Surely something could be done to help people in these circumstances?

Mrs. Thatcher

A great deal has been done by this Government to help widowed mothers. Indeed, the widowed mother's allowance has gone up in the last twelve years from 40s. to 97s. 6d.

National Insurance Fund

10. Mr. Ross

asked the Minister of Pensions and National Insurance if he will estimate the amount to be paid into the National Insurance Fund this year by contributions to the graduated insurance scheme, and the total amount to be paid out.

Mrs. Thatcher

It is estimated that graduated contributions and payments in lieu will total £232 million and that £1,401 million will be paid out of the National Insurance Fund.

Mr. Ross

Will the Minister answer the Question that she knew was being asked? What is being paid out in respect of graduated pensions for this year?

Mrs. Thatcher

I answered the question which the hon. Gentleman asked. I will answer his supplementary: the sum is approximately £½ million.

Mr. Ross

The answer is that the hon. Lady's Department will collect £232 million this year in graduated contributions and will pay out in respect of the responsibilities for that £½ million. Is the Minister aware that there is a growing dissatisfaction and realisation that this is essentially unfair, and will she take steps to ensure that both immediately and ultimately people will get value for the money being deducted from their wages?

Mrs. Thatcher

I find no growing dissatisfaction with the National Insurance Scheme except that engendered by hon. Members opposite.

11. Mr. Lawson

asked the Minister of Pensions and National Insurance if he will estimate the total amount paid into the National Insurance Fund since its inception by people who have now retired or died and in respect of whom no graduated pensions liability was acquired.

11

Mrs. Thatcher

I regret that the available information does not enable me to do so.

Mr. Lawson

If the hon. Lady looks into this question she might be able to give us some explanation why it is that the contributions, as a percentage of benefits, have gone up from 74 per cent. in 1959 to 84 per cent. in 1962. Does this not suggest that there is a very large fraudulent extraction of contributions from the people of this country?

Mrs. Thatcher

I make no comment on the actual figures given by the hon. Gentleman. I do not agree that it is a fraudulent extraction. Of those now drawing retirement pensions, the man who retired this year aged 65 could not have contributed, had he entered the scheme in 1926, more than £240 towards the cost of his pension, together with a similar sum on the part of his employer. The capital value of the pension for such a man, if single, is £1,700 and, if married, £3,500.

Mr. Mitchison

Is not the net result of all this that the Treasury is paying less and less by way of its contribution?

Mrs. Thatcher

This year the Exchequer is paying some £212 million to the National Insurance Fund.

12. Mr. J. Bennett

asked the Minister of Pensions and National Insurance what was the total income of the National Insurance Fund from employed persons and employers, respectively, including graduated contributions, in the year 1959–60; and what is the estimated income for the current year.

Mrs. Thatcher

In 1959–60 contributions from employed persons were £319 million and from employers £352 million. The estimates for this year, including graduated contributions and payments in lieu under the graduated pension scheme introduced in 1961, are about £499 million from employees and £562 million from employers.

Mr. Bennett

Will not the hon. Lady agree that this increase in revenue is really the result of a hidden form of taxation which falls heavily on those who can afford it least?

Mrs. Thatcher

The increases in contributions are primarily caused by the 12large increases in benefits. They are further caused by the increasing number of people drawing increased benefits.

National Assistance

13. Mr. Millan

asked the Minister of Pensions and National Insurance if he will estimate the reduction in the number of weekly allowances paid by the National Assistance Board consequent on the introduction of the new National Insurance scales.

Mrs. Thatcher

Just over 66,000 National Assistance supplements to National Insurance benefits have ceased in consequence of the increases made this year in the rates of those benefits.

Mr. Millan

Is this figure not a demonstration of the fact that because National Assistance scales have been increased to a much less extent than National Insurance scales in the last increase the people who are by definition among the very poorest, namely, those on National Assistance, are getting the smallest increases, and is this not thoroughly undesirable?

Mrs. Thatcher

Hon. Members opposite complain when we have too many people on National Assistance. They now complain because we increased National Insurance benefit rates to take some people off National Assistance. That figure is inflated by the ending of discretionary winter fuel payments in April.

14. Mr. J. Hill

asked the Minister of Pensions and National Insurance if he will estimate the weekly reduction in expenditure by the National Assistance Board following the introduction of the new National Insurance benefit scales.

Mrs. Thatcher

£200,000. But the joint effect of the recent National Insurance and National Assistance changes has been to increase the total income of recipients of National assistance by about £670,000 a week.

Mr. Hill

Will not the hon. Lady agree that because of these figures it is time that the Government thought again? As my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) has already said, people with the lowest possible incomes are suffering because of the 13National Assistance level not being increased when the pensions were increased.

Mrs. Thatcher

I showed in my original answer that people on the lowest possible incomes are now getting some £670,000 a week more than they were previously.

Blyth (National Assistance)

18. Mr. Milne

asked the Minister of Pensions and National Insurance what effect rises in the number of unemployed have on the payment of national Assistance; and what were the amounts paid in the Blyth constituency during the years 1958, 1959, 1960, 1961, and 1962, respectively.

Mrs. Thatcher

If the number of persons unemployed rises, and, in consequence, there is an increase in the number of such persons who apply for National Assistance, the effect is, of course, to raise expenditure on National Assistance. I regret that figures asked for by the hon. Member are not now available for years before 1961. The total amount of National Assistance paid to persons registering at employment exchanges in the Blyth constituency was: about £29,200 in 1961 and about £48,400 in 1962.

Mr. Milne

Is the hon. Lady aware of the corroding effect of unemployment and the fact that it leads to increased expenditure of this sort which would be far more gainfully employed in bringing new jobs to the area, and will she consult the appropriate Government Department responsible for this unemployment to see that they do something about it?

Mrs. Thatcher

My right hon. Friend is pursuing that question very vigorously. The figures for which I am answerable show that the people who are unemployed have no hesitation in seeking help from the National Assistance Board.

19. Mr. Milne

asked the Minister of Pensions and National Insurance what was the amount of National Assistance paid out in the Blyth constituency during 1962; and what effect the new pensions increase will have on the figure for 1963.

Mrs. Thatcher

For reasons which have been explained to the House previously, it is not possible to give the total amount of National Assistance paid to all recipients in a particular locality.

14

Mr. Milne

Is the hon. Lady aware that some of the recent pensions increases have been detracted from because of the method of paying National Assistance, and will she look again more closely into this matter, which is having an adverse effect not only in my constituency but throughout the country?

Mrs. Thatcher

The combined effect of recent pensions increases and National Assistance increases means that more will be spent next year on national Assistance than this year—because of the last but one National Assistance increase. For 1963–64, the estimated expenditure on National Assistance grants is £209 million, compared with £196 million last year.

Industrial Injuries

20. Mr. Prentice

asked the Minister of Pensions and National Insurance whether he will introduce legislation to repeal Section 7(3) of the Industrial Injuries Act, which provides that benefit is not payable for accidents occurring outside Great Britain, in view of the breach made in this principle by the large number of bilateral agreements with other countries which enable benefit to be paid in these cases.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Lieut.-Commander S. L. C. Maydon)

Where there is a reciprocal agreement, it can specify which legislation should cover any accident happening in one or other of the two countries, and, if our legislation covers an accident happening in the other country, we can rely on the authorities of that country to make inquiries on our behalf. To this extent, reciprocal agreements, the making of which was provided for in Sections 84 and 85 of the National Insurance (Industrial Injuries) Act, 1946, do not represent a breach of Section 7(3) of that Act. But we can apply our legislation in another country only if we have an agreement with that country. My right hon. Friend therefore has no proposals for amending the Act in the manner suggested by the hon. Member.

Mr. Prentice

Have we now reached this position, that a British worker abroad—for example, a coach driver taking holiday-makers—if he is injured in, say, France, Italy, or one of several 15other countries, will get benefit under our Industrial Injuries legislation, whereas if he is injured in, say, Spain he will not, although he has been contributing to the fund and so has his employer? Does not this create an anomaly, and will the Government look at the matter again to see whether everyone can be put on the same footing?

Lieut.-Commander Maydon

There are very many workers working throughout the world whose employers have some link with this country, and it would be far too difficult to specify which of these workers our legislation should cover. If we applied our legislation abroad without a reciprocal agreement, there might be duplicate cover for benefit if we could not rely on the authorities of the country concerned to co-operate with us.

Mr. Mitchison

Where is the sense or justice in making the remedies for an injured man dependent upon the existence or non-existence of an agreement of this kind? Is it not high time that this tangle was looked at again?

Lieut.-Commander Maydon

I assure the hon. and learned Gentleman that we are constantly looking at these agreements to see how they can be improved. We have come to our present conclusions after considerable examination.